Imputed Income and Health Insurance Benefits

State of Wisconsin provisions allow UW employees to add a domestic partner, or a partner's child to their health insurance. Adding a non-tax dependent to health insurance coverage may have tax consequences.

Refer to the UW System web page, Domestic Partner Benefits for information on the definition of a domestic partnership and how to determine tax dependent status.

If a dependent is added to health insurance coverage who does not qualify as a tax dependent, the Fair Market Value of the UW contribution toward that coverage is considered taxable income (imputed income) which is subject to tax withholding. Therefore, federal, State, Social Security and Medicare taxes may increase. As a result, net pay will decrease. The health insurance premiums will continue to be deducted on a pre-tax basis.

Imputed income will have no impact on reported earnings for an employee’s Wisconsin Retirement System account, State Group Life Insurance coverage, or Income Continuation Insurance coverage.

This information does not constitute tax advice. Consult your tax advisor for specific guidance regarding federal and state income tax.

Monthly Imputed Income Tables

The Imputed Income tables estimate monthly imputed income based on the Fair Market Value for each health plan and the number of non-tax dependents covered. The Fair Market Value amounts will be adjusted annually.

Imputed Income Calculator

The imputed income calculator estimates the tax implications of extending health insurance coverage to a domestic partner or eligible non-tax dependents. Use the Earnings Statement Legend to locate the values needed for the imputed income calculation.